Advice on renting out my flat before selling

sxp842 · 11 July 2017 at 6:21AM

Hi all

I'm just looking for a bit of advice on what to do with my flat. I purchased a 2 bed flat in Birmingham city centre a few years ago and I currently rent out one of the rooms to a lodger. However I am relocating back to my home town in Surrey. I'll finish my current job mid-August with my new job starting beginning of September.

Ideally I would like to sell my flat so my partner and I can use the money to purchase somewhere in Surrey. However I'm not too sure I'll be able to sell my flat that easily. It's been on the market for a week and only had 1 viewing. Normally properties in my area go quite quickly. I'm beginning to think its overvalued, despite the valuation being based on 3 different estate agents opinion!

Anyway, with that in mind, I'm considering renting out my flat. I don't really want to leave the flat sitting there empty while I pay a mortgage on it. My current lodger knows I'm looking to sell and she is 50/50 as to whether she'll be staying, but she's said she won't be able to let me know until mid-August (around the time I'll be leaving). She's currently on a one month notice period now so she'd be fine to leave if she did carry on living here and I did get a buyer.

However I was considering renting out the other room (my bedroom) from mid-August. Ive found someone who is only looking for somewhere from mid-August until end of November. However I don't have any experience of being a live out landlord. For example, my current lodger pays rent with bills included but I don't really want to do this if I'm not living in the property and have no control over the electricity etc! The house is also not set up for tenants e.g no locks on the bedroom doors. Additionally, I'm a bit unsure about how long of a tenancy to give people. A 3 month tenancy would be perfect if I get a buyer for my flat soon. But if I don't, I'm worried it's going to be really hard to find a replacement tenant in November. Also, my current tenant is on a lodgers agreement. Would I need to put my current and new tenant on a different type of tenancy agreement? And would I be able to charge the Tenants separately for council tax, or would I need to factor it into the rent?

Any advice on the above would be much appreciated! I'm getting a bit worried about having to sort this all out by September!

Pixie5740 · 11 July 2017 at 6:53AM

Forget letting the flat out before selling. Whilst you might set up a 3 month AST you won't legally be able to go to court for a possession order until 6 months have passed. That could slow down the whole sale and having tenants in-situ will put a lot of buyers off.

When you move out your lodger will cease to be a lodger and become a tenant with an AST and all the rights that go along with that which means you'll need to give more than 1 month's notice that you might go to court to get a possession order.

Your flat has only been on the market for a week. Anything will sell if prices correctly do how does your price compare with sold prices for similar properties in the area?

Tiners · 11 July 2017 at 7:40AM

Firstly a week really isn't that long, but... EA's are over valuing more than ever in the current supply starved market, they're desperate to win the instruction and will tell vendors anything to get them to sign, before readjusting their expectations further down the line.

You've said yourself you feel it probably is overvalued and even if you found a perfect tenant all the hassle and expense of becoming a HMO non resident landlord of a property that ultimately your aim is to sell anyway is utter madness imo.

Crashy_Time · 11 July 2017 at 12:51PM

If you know it is over-valued, why not just tell the EA to market it at a price you think will sell?

CIS · 11 July 2017 at 2:12PM

And would I be able to charge the Tenants separately for council tax, or would I need to factor it into the rent?

Unless the occupier(s) rent the whole of the property and have a joint rental liability on the whole of the property then it would fall as a HMO for council tax purposes - this means that the owner is responsible for payment of any council tax in a council tax HMO.

Craig

sxp842 · 11 July 2017 at 8:59PM

Thanks for the replies everyone. I hadn't realised that tenancies under 6 months weren't enforceable, i've had a look into this and it does seem like something that would put some buyers off.

I think I'll probably have to reassess the price at the end of the week if i don't get any more interest. I know two weeks isn't that long, but flats in Birmingham city centre tend to move quite quickly. That's why i'm a bit concerned to not have had much interest.

If i haven't got any decent offers by mid-August even with a price reduction then i'll have to decide whether to rent it out for a year and try selling it in the future. The service charges are ridiculously high at the moment, but a right to manage process will be set up from August which should bring the service charges down substantially. Although it's going to take about a year or two to see any real reduction in the service charges. It could therefore be worth waiting a year before selling it, but i'm assuming i'll need to look into getting consent to let from my mortgage company

Advice on renting out my flat before selling

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